Builtrite had sales of $900,000 and COGS of $280,000. In addition, operating expenses were calculated at 25% of sales. Builtrite also received dividends of $50,000 and paid out common stock dividends of $25,000 to its stockholders. A long-term capital gain of $70,000 was realized during the year along with a capital loss of $50,000

a). What is Builtrites taxable income?

b). Based on their taxable income, what is Builtrites tax liability?

c). If we add to our problem that Builtrite also had $30,000 in interest expense, how much would this interest expense cost Builtrite after taxes?

d). If Builtrite had experienced a long-term capital loss of $40,000 (instead of the $50,000 long-term capital loss stated in the problem), and still had the $70,000 long-term capital gain stated in the problem, which of the following is correct (compared to the original answer):

e). (This problem is not related to the above problem) Last year Builtrite had retained earnings of $140,000. This year, Builtrite had true net profits after taxes of $75,000 which includes common stock dividends received of $10,000. Builtrite also paid a preferred dividend of $35,000. What is Builtrites new level of retained earnings?